Book $120,000 of sales in a month on a plan that pays 5% up to a $100,000 target and 8% above it, and your commission is $6,600. Add $2,000 of base pay and you’re at $8,600 for the month.
How does tiered commission work?
The calculator splits your sales at the target. Sales up to it earn the first rate, and only the sales above it earn the second. Base pay goes on top, and that total is your pay before deductions. On a flat plan, put the same rate in both boxes. The last line estimates what you keep, using your province and a full year of equal periods.
This fits most sales jobs that pay a bonus rate for beating a goal. But if your plan pays the higher rate on all sales once you pass the target, the tool won’t match it, since it applies the second rate only to the extra sales. A section further down shows how to work that case out.
What numbers start in the calculator?
| Item | Default value |
|---|---|
| Sales in the period | $120,000 |
| Commission up to target | 5% of the first $100,000 |
| Commission above target | 8% of the extra sales |
| Base pay | $2,000 a period |
| Periods in a year | 12 (monthly), 4 for quarterly |
What does a strong month pay in Ontario?
With the defaults, the first $100,000 of sales earns $5,000 and the extra $20,000 earns $1,600. Commission is $6,600, which is 5.50% of sales. Total pay before deductions is $8,600.00.
After deductions you’d take home about $6,366.56 a month, assuming every month brings the same $8,600, which adds up to $103,200 a year.
A slower month looks different. Sales of $80,000 stay under the target, so commission is $4,000 at 5.00%. With base pay the total is $6,000, and about $4,591.59 is left after deductions. Repeat the strong month in Alberta and about $6,390.21 stays with you.
Now picture Jordan in Calgary, who sells $150,000 in a monster quarter-end month on the same plan. The first $100,000 earns $5,000 and the extra $50,000 at 8% earns $4,000. That’s $9,000 of commission, an effective 6.00% of sales, and $11,000 with the base pay.
Is a tiered plan better than a flat rate?
A higher second rate pays off in big months, but a low base makes the slow ones harder. Try the same sales with a flat 5% and no base pay. The total is $6,000, which is $2,600 less than the tiered plan. If you’re paid by the hour instead, the hourly to salary calculator gives you a comparison. For a whole year at a steady level of pay, use the take-home pay calculator.
What if the higher rate applies to every sale?
Some plans work as a cliff: beat the target and the better rate applies to all your sales, including the ones under the target. On $120,000 at 8% across the board, commission is $9,600, which is $3,000 more than the $6,600 the tiered version pays. Add the $2,000 base and the month is $11,600. Type 8% into both rate boxes to get that result and its deduction estimate. When you compare offers, ask which version you’re getting, because on the same sales that one sentence can move a few thousand bucks.
Is commission taxed differently from a salary?
No, commission is taxed the same way as salary. The CRA counts commissions as employment income, in the same bucket as salary, wages, bonuses and tips, as its page on employment income on line 10100 explains. Your employer takes off income tax, CPP and EI as it does from other pay, and the real tax is settled when you file.
What does the tool leave out?
- Set the periods in a year to match your plan: 4 for quarterly sales, 12 for monthly.
- Commission isn’t always paid in the month of the sale, and chargebacks and delays aren’t modelled.
- The after-deduction line assumes equal pay all year, so a very large month may be taxed differently on the pay date.
- Draws against future commission, common in some plans, aren’t part of the tool.
- Expenses you pay yourself aren’t deducted here.
A large one-off commission cheque behaves like a bonus, so run it through the bonus tax calculator as well.
Where the numbers come from
Commission is plain arithmetic on the rates you enter. The deduction estimate uses 2026 tax brackets and contribution limits from the published federal and provincial data, rechecked on 29 September 2026. This is an independent site, not a government service, and it doesn’t speak for one.
About this calculator
- What it does
- Add up base pay and tiered commission, then estimate the pay you keep.
- Category
- Payroll and Salary
- Last checked
- September 30, 2026
- Result type
- Estimate for information only, not tax advice.
Frequently asked questions
How do I calculate tiered commission?
Split your sales at the target. Sales up to the target earn the first rate, and only the sales above it earn the second rate. Add the two amounts to get commission, then add base pay for the period's total before deductions. For example, $120,000 at 5% up to $100,000 and 8% above gives $6,600.
What commission do $120,000 of sales earn?
On a plan that pays 5% up to a $100,000 target and 8% above it, $120,000 of sales earns $6,600 in commission, which is 5.50% of sales. The first $100,000 pays $5,000 and the extra $20,000 pays $1,600. With $2,000 of base pay, the month comes to $8,600 before deductions.
How do I set a flat commission rate?
Put the same percentage in both rate boxes and the target stops affecting the result, because every dollar of sales earns that one rate. At 5% on $120,000, commission is $6,000. Base pay still goes on top of it.
What do I keep from $8,600 a month in Ontario?
About $6,366.56 a month after deductions, if every month of the year pays $8,600. That adds up to $103,200 a year before deductions. A single very large month may be taxed differently on the pay date.
What do I enter for quarterly pay?
Set periods in a year to 4 and enter the sales and base pay for a single quarter. If you leave it at 12, the tool treats the quarter as a month, and the estimate after deductions comes out wrong.
Is commission taxed differently from a salary?
No. The CRA treats commissions as employment income, the same as salary, wages, bonuses and tips. Your employer withholds income tax, CPP and EI from commission pay as it does from other pay, and the final tax is settled when you file your return.
Sources and updates
Updated: . How we check rates · Editorial team · Updates